The EIU view

Mozambique's long-running debt scandal has pushed the country into financial crisis, as it remains largely cut off from international debt markets, and economic growth is weak. The ruling party, Frelimo, is expected to win the general election in October 2019. The economy will receive a boost once major LNG projects come online, with significant export opportunities and inward investment. However, spillover effects for most of the population will be extremely limited.

Reserve requirement raised
Despite the expectation of an uptick in inflation, we believe that domestic demand is likely to remain muted in 2019, as broader economic growth will remain subdued over the year.

Key figures arrested over debt scandal
The scandal has pushed Mozambique into a financial crisis. Investigations of the debt crisis could unearth further details, but we expect the authorities to look for a resolution.